Kathmandu, July 20

Statkraft International, the developer of 650-megawatt Tamakoshi 3 hydroelectric project, has sought government’s permission to conduct a study on impact of earthquakes on the project site.

The devastating quakes of April and May is said to have affected the flow of the Tamakoshi River. It is also said landslides triggered by the earthquakes have affected the area proposed for construction of the dam.

“The Norwegian company now wants to conduct an impact study prior to beginning negotiations on Project

Development Agreement (PDA),” said a reliable source at the Investment Board Nepal (IBN), which is overseeing implementation of Tamakoshi 3 hydroelectric project.

The IBN Secretariat is expected to table the Norwegian company’s proposal at the next board meeting, which will be held under the chairmanship of Prime Minister Sushil Koirala.

“During the board meeting, discussion will also be held on extending tenure of Tamakoshi 3 Project Negotiation Agreement (PNA),” the source said.

The IBN had signed the PNA with the project developer in April 2013 to provide security of tenure over the project because of the expiry of survey licence.

The government, in March 2007, issued the project’s survey licence to SN Power, a Norwegian company owned by Statkraft, Norway’s largest utility company, and Norfund, a state-owned Norwegian investment fund for private companies in developing countries.

Since the tenure of survey licence cannot be extended by more than five years, the government and SN Power had signed the PNA with a validity of 18 months. During this period, the IBN and the project developer were supposed to conclude the PDA, but despite holding 13 rounds of negotiations, both the parties could not strike a deal.

Because of this, the government, earlier this year, had extended the tenure of PNA for six months till April-end. But the PDA could not be signed during this period as well because of the earthquakes.

“The IBN is now mulling over extending the PNA by up to a year, which means project implementation will be delayed,” the source said.

Tamakoshi 3 is being built on Tamakoshi River in Dolakha and Ramechhap districts at a cost of around Rs 111.30 billion. The project, which is expected to affect Lamidada, Namdu, Bhimeshwor and Jugu villages, has the potential to generate 2,350 gigawatt-hour of electricity per year.

The power generated by the plant will be evacuated using an 81-km 400 kV transmission line to be developed to Dhalkebar.

Like the 900MW Upper Karnali and 900MW Arun-3 hydroelectric projects — PDAs of which were signed earlier by the IBN — Tamakoshi 3 will also sell a bulk of its power in India.